Economic Growth in Euro Area
The Euro area's GDP growth from 2013 to 2022 was modest and uneven across member states. The region experienced gradual recovery post-Eurozone crisis, but growth remained constrained by structural weaknesses, unfavorable demographics and political uncertainties. The COVID-19 pandemic led to a significant contraction in 2020. Recovery in 2021-2022 was robust but uneven, reflecting disparities in fiscal capacity and economic structures among member countries.
The Euro Area economy recorded an average real GDP growth rate of 1.4% in the decade to 2022, below the 1.8% average for Major Economies. In 2022, real GDP growth was 3.4%. For more GDP information, visit our dedicated page.
Euro Area GDP Chart
Euro Area GDP Data
2018 | 2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|---|
Economic Growth (GDP, ann. var. %) | 1.8 | 1.6 | -6.2 | 5.9 | 3.5 |
GDP (EUR bn) | 11,653 | 12,043 | 11,517 | 12,474 | 13,507 |
Economic Growth (Nominal GDP, ann. var. %) | 3.4 | 3.3 | -4.4 | 8.3 | 8.3 |
Economy stagnates, dodges recession thanks to Southern countries
The economy remained unchanged in seasonally adjusted quarter-on-quarter terms in Q4. This followed Q1’s 0.1% dip and beat market expectations of another 0.1% drop. Compared with Q3 2022, seasonally adjusted GDP increased by 0.1% year on year in Q4, following a flat reading in the previous quarter.
The quarterly stagnation reflected diverging performances between the Eurozone’s largest economies. Germany’s GDP fell 0.3% over the previous quarter in Q4, while the French economy was flat. In contrast, Italy’s economy expanded 0.2%, while Spanish GDP grew 0.6%.
Momentum should remain subdued in the first quarter of this year, restrained by depleted savings and still-tight financing conditions. In 2024 as a whole, GDP is likely to expand at no more than a paltry pace. The industrial sector should rebound thanks to improved external demand. The disbursement of EU funds should support activity, however. Higher-than-expected debt-servicing costs for highly indebted Mediterranean governments due to increased financial and geopolitical instability pose a downside risk to the outlook.
Commenting on the outlook, Bert Colijn, senior Eurozone economist at ING, stated: “For the months ahead, there are some green shoots for the Eurozone economy. Survey indicators show signs of bottoming out, and real wage growth is slowly starting to recover; the latter should put more money in consumers’ pockets. Over the course of the year, that effect should become bigger. And financial conditions are easing, which is resulting in some bottoming out of lending indicators. That helps investment later in the year. We don’t expect a material pickup in GDP growth in the first quarter though. In fact, we only expect a material improvement in the Eurozone economy much later in the year.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects European GDP projections for the next ten years from a panel of 73 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for European GDP.
Download one of our sample reports to visualize what a Consensus Forecast is and see our European GDP projections.
Want to get access to the full dataset of European GDP forecasts? Send an email to info@focus-economics.com.
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